XRP Bulls to Target $0.44 on US Debt Ceiling Hopes

Key Insights:

• On Monday, XRP gained 0.49% to end the session at $0.42732.
• SEC v Ripple silence continued to cap the upside, with investors mindful of an imminent Court ruling.
• The technical indicators remain bearish, signaling a return to $0.40.

On Monday, XRP rose by 0.49%. Following a 0.20% gain on Sunday, XRP ended the day at $0.42732. Despite the bullish session, XRP failed to hold onto the $0.43 handle for a third consecutive day.

Tracking the broader market, XRP fell to a first-hour low of $0.42157. Steering clear of the First Major Support Level (S1) at $0.4206, XRP rose to a mid-morning high of $0.43038. XRP tested the First Major Resistance Level (R1) at $0.4307 before easing back to sub-$0.4250. However, XRP found late support to wrap up the day at $0.42732.

Hopes for a Resolution to the US Debt Ceiling Crisis Delivered Support

It was a quiet start to the week. There were no updates from the ongoing SEC v Ripple case to influence. While there was no Court activity to consider, SEC v Ripple-related chatter has gained momentum.

However, the anti-SEC chatter has failed to move the dial. Increasing uncertainty toward the case continues to leave XRP short of the $0.50 handle and the current year’s high of $0.58479.

While XRP remains in limbo, market sentiment toward the US debt crisis and Fed monetary policy delivered support.

The NY Empire State Manufacturing Index tumbled from +10.8 to -31.8. Economists forecast a more modest decline to -3.75. The weak numbers continued to fuel bets on the Fed hitting the pause button in June, despite elevated inflation and tight labor market conditions.

The Day Ahead

It is a busy Tuesday for XRP and the broader crypto market.

US retail sales and industrial production will be in focus this afternoon. The retail sales numbers should have more impact as investors look for signals that could influence the Fed.

However, Fed chatter and US debt ceiling-related news will also need consideration. Failed talks between US President Biden and House Speaker Kevin McCarthy would spook investors.

Ahead of the US session, economic indicators from China will set the tone. Fixed asset investment, industrial production, retail sales, and unemployment numbers for April will provide direction. We expect the industrial production and retail sales figures to have more impact.

Recent economic indicators from China have signaled a waning economic recovery. Another round of weak numbers would fuel recessionary fears and weigh on riskier assets.

While economic indicators from China and the US will provide direction, SEC v Ripple case-related updates remain the focal point.

Investors should also monitor SEC activity and Binance and Coinbase (COIN)-related news.

XRP Price Action

At the time of writing, XRP was down 0.17% to $0.42659. A mixed start to the day saw XRP rise to an early high of $0.42807 before falling to a low of $0.42655.

XRP Technical Indicators

Resistance & Support Levels

XRP needs to avoid the $0.4264 pivot to target the First Major Resistance Level (R1) at $0.4313. A move through the Monday high of $0.43038 would signal a bullish session. However, SEC v Ripple updates and US debt ceiling-related news must support a breakout session.

In the case of an extended rally, XRP would likely test the Second Major Resistance Level (R2) at $0.4352 and resistance at $0.44. The Third Major Resistance Level (R3) sits at $0.4440.

A fall through the pivot would bring the First Major Support Level (S1) at $0.4225 into play. However, barring another crypto event or risk-off-fueled sell-off, XRP should avoid sub-$0.4150. The Second Major Support Level (S2) at $0.4176 should limit the downside. The Third Major Support Level (S3) sits at $0.4088.

The EMAs and the 4-hourly candlestick chart (below) sent bearish signals.

At the time of writing, XRP sat below the 50-day EMA, currently at $0.43137. The 50-day EMA eased back from the 200-day EMA, with the 100-day EMA falling back from the 200-day EMA. The EMAs delivered bearish signals.

A move through R1 ($0.4313) and 50-day EMA ($0.43137) would give the bulls a run at R2 ($0.4352) and $0.44. However, failure to move through the 50-day EMA ($0.43137) would leave S1 ($0.4225) and sub-$0.42 Major Support Levels in view. A move through the 50-day EMA would send a bullish signal.